- 1. Political economy is a social science that studies the relationships between individuals, society, and government in the production and distribution of resources. It examines how political institutions and economic systems interact to shape the allocation of wealth and power. Political economy analyzes the dynamics of markets, policies, and institutions to understand issues such as inequality, economic growth, and development. By exploring the interplay between politics and economics, political economy seeks to inform policies and promote better societal outcomes.
What is political economy?
A) The study of only politics without any economic considerations.
B) The study of only economics without any political considerations.
C) The study of law and society.
D) The study of how political institutions and economic systems interact.
- 2. Which economic system is characterized by government ownership of the means of production?
A) Capitalism
B) Mercantilism
C) Communism
D) Socialism
- 3. Which economic system relies on market forces to determine prices and allocate resources?
A) Socialism
B) Mercantilism
C) Communism
D) Capitalism
- 4. In the context of political economy, what is a tariff?
A) A tax on exported goods to encourage domestic consumption.
B) A subsidy given to foreign producers for exporting goods.
C) A tax on imported goods to protect domestic industries.
D) A restriction on the flow of capital across borders.
- 5. Which economic concept refers to the total value of all goods and services produced within a country's borders in a specific time period?
A) Gross Domestic Product (GDP)
B) Inflation Rate
C) Consumer Price Index (CPI)
D) Balance of Trade
- 6. In the context of international political economy, what does the acronym WTO stand for?
A) World Treaty Organization
B) World Taxation Organization
C) World Trade Organization
D) World Tariff Organization
- 7. Which concept refers to the ability of a country to produce a good at a lower opportunity cost than another country?
A) Comparative advantage
B) Balance of payments
C) Absolute advantage
D) Specialization
- 8. What is the economic term for a prolonged period of negative economic growth and high unemployment?
A) Deflation
B) Inflation
C) Boom
D) Recession
- 9. Which economic theory proposes that government should increase spending and lower taxes to stimulate demand during economic downturns?
A) Classical economics
B) Keynesian economics
C) Monetarism
D) Supply-side economics
- 10. What is the term for the study of income distribution and inequality within societies?
A) Monetary economics
B) Behavioral economics
C) Development economics
D) Distributional economics
- 11. What concept refers to the theory that economic production should serve the welfare of all individuals in society?
A) Development economics
B) Behavioral economics
C) Neoclassical economics
D) Welfare economics
- 12. What does the acronym NAFTA stand for?
A) North American Free Trade Agreement
B) National Association of Financial Trade Agreements
C) National Agreement for Farm Trade Advancement
D) North Atlantic Free Trade Agreement
- 13. Which term describes the phenomenon of increasing interconnectedness of economies and societies?
A) Economic nationalism
B) Globalization
C) Protectionism
D) Localization
- 14. Which term describes a situation where the market fails to allocate resources efficiently?
A) Factor mobility
B) Perfect competition
C) Market failure
D) Pareto efficiency
- 15. The concept of 'invisible hand' is associated with which economist?
A) Karl Marx
B) Adam Smith
C) Milton Friedman
D) John Maynard Keynes
- 16. What is the term for the phenomenon where wages increase at a slower rate than productivity growth?
A) Wage stagnation
B) Real wage decline
C) Nominal wage growth
D) Wage inflation
- 17. Which economic concept refers to the general increase in prices over time?
A) Recession
B) Inflation
C) Boom
D) Deflation
- 18. Which theory argues that governments should not interfere in the economy?
A) Keynesian economics
B) Laissez-faire
C) Socialism
D) Marxism
- 19. Which country has the world's largest economy by GDP?
A) China
B) Japan
C) United States
D) Germany
- 20. What type of market structure has many sellers but differentiated products?
A) Monopoly
B) Monopolistic competition
C) Perfect competition
D) Oligopoly
- 21. What is the term for when a company dominates a specific market?
A) Perfect competition
B) Oligopoly
C) Monopolistic competition
D) Monopoly
- 22. Which type of unemployment results from changes in the business cycle?
A) Seasonal
B) Frictional
C) Cyclical
D) Structural
- 23. What is the term for increasing the value of a country's currency in relation to other currencies?
A) Appreciation
B) Deflation
C) Depreciation
D) Inflation
- 24. Which country is known for implementing a 'command economy' during the rule of Mao Zedong?
A) United States
B) Germany
C) Russia
D) China
- 25. Which institution sets short-term interest rates in the United States?
A) Treasury Department
B) Securities and Exchange Commission (SEC)
C) Federal Reserve
D) Internal Revenue Service (IRS)
- 26. What is the term for the proportion of people actively seeking employment who are unable to find it?
A) Labor force participation rate
B) Minimum wage
C) Trade deficit
D) Unemployment rate
- 27. Which organization is responsible for overseeing international monetary and financial issues, and promoting global monetary cooperation?
A) World Trade Organization (WTO)
B) United Nations (UN)
C) European Central Bank (ECB)
D) International Monetary Fund (IMF)
- 28. Which term refers to the process of selling state-owned assets to private investors?
A) Regulation
B) Subsidization
C) Nationalization
D) Privatization
- 29. In economics, what does the term 'ceteris paribus' mean?
A) Purchasing power parity
B) All other things being equal
C) Supply and demand
D) Opportunity cost
- 30. What is the term for a policy of government spending and taxation to influence the economy?
A) Industrial policy
B) Trade policy
C) Fiscal policy
D) Monetary policy
- 31. Which term refers to the mechanism by which the government manages the supply of money and interest rates to influence the economy?
A) Industrial policy
B) Fiscal policy
C) Trade policy
D) Monetary policy
- 32. In economics, what does the term 'Gini coefficient' measure?
A) Consumer price index
B) Labor productivity
C) Income inequality
D) Interest rate
- 33. What is the term for imposing a financial penalty on imported goods to protect domestic industries?
A) Dumping
B) Tariff
C) Subsidy
D) Quota
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